Daily Archives: July 19, 2007

Ive been fascinated by the theory and practice of innovation for years, having taught and developed the New Products course at the Kellogg School of Management for seven years. My recent blog entry on the Conference Boards critique of Canada as a stagnant cesspool of unimaginative copycats has spurred my interest in this area even further.

The more I personally experience of Canadas business climate, the more despondent I become. The Canadian economy is an American business clone living in a different political-social-cultural ecosystem. The supermarkets are all-American styles, but the service and stocking systems are pathetic. Same for all the franchised services? All-American style, but with the Canadian spin on service. Is there a unique Canadian cuisine? Canadian health care advances (American style, but without the budget or the service orientation)? Canadian rituals and customs? Uniquely Canadian brands (you mean Presidents Choice?)? Almost everything manufactured is Made in China and consumers here dont seem to really care: Made in Canada seems to signify nothing in any sector of the economy. And why should it?

No wonder Canadian national wealth is based on the hewing of trees and the dredging of oily tar sands. Oh, and tourism. Camping, fishing, hunting and skiing. It is a patchwork economic system based on raw material exports, exploiting land mass, and a plethora of professional services based largely on (watered down) imitation (of course there are notable exceptions, like Research in Motion, but far too few of them). It needs more.

Many of these critiques could also be leveled at the American economy. It isnt nearly as apathetic as Canadas, but its design and innovation orientation are slipping. What does Made in American signify anymore? In which sectors (besides Hollywood, weaponry, and high-tech) does it matter anymore? American and Canadian, heck, the rest of the world too: these are challenging times requiring immense innovation. We can all do better.

I recently came back from a magnificent trip to Italy and Switzerland as part of the European Association for Consumer Research conference (Stefania, Cele and Mary Ann put on the best conference Ive ever attended bravissimo!). While I was on that trip I spent a lot of time with my colleague Diego Rinallo at Bocconi University in Milan, and we spoke about the topic of innovation, and creating innovative industries. I cant say enough about Bocconi, by the way. It is the #1 University in Italy, it has a gorgeous campus and, best of all, it is chock full of brilliant scholars doing cutting-edge, important work in the areas of consumer culture and marketing, people like Antonella Caru, Bernard Cova, Stefania Borghini, Stefano Pace and of course Diego.

So let’s talk fashion. Milan is chock full of important and innovative designers: Prada, Armani, Versace, and Dolce & Gabbana are households names around the world. There are many others: Emilio Pucci, Navarra, Cavalli. Somehow, I was under the impression that Italy and in particular Milan had always been important fashion centers, that their innovation in clothing design had been long-standing, like maybe from the Roman ages when togas were all the rage. But Diegos recent historical studies set me straight.

Amazingly, given its international influence and renown, the Italian fashion industry is actually only 56 years old. That’s pretty amazing. Before February 12th, 1951, there was no Italian fashion industry as such. Italian dressmakers were simple copycats. They looked to Paris for design, creativity, novelty. Paris dictated fashion. Milanese and Italian dressmakers built it. Doesnt that sound familiar?

Then along came Giovanni Battista Giorgini. He was originally a buyer of handcrafted leather goods (and much more) for a set of American department stores, a guy in touch with markets and marketing, who knew how the fashion industry worked at the level of merchandising and retailing. With some hard work, he convinced thirteen important Italian dressmakers to present their own designs and collections in Florence, at the beautiful Sala Bianca of Pitti Palace, in front of a selection of American buyers and journalists.

And the rest, as they say, is history. The idea caught on, Italy became a center for design, and a major high-value-added Milanese and Italian industry was born.

I think that major case studies of how innovative industries and companies begin and work is of immense value to managers, educators, and policy-makers. Id love to work with Diego on building a more rigorous examination of Giorginis Milanese success story into an article about creating innovative industries.

Here are Five Initial Principles for Creating Innovative Industries that we can learn from the Creation of the Milanese Fashion Design Industry. Without wanting to personalize them too much (because I believe and assert that we can definitely learn from what he has done, and others can do it again in other industries), I call them The Giorgini Principles.

1. Code-Switching: The innovative industry movement was led by Giorgini, a man with cross-continental experience, a fluent translator who spoke fluent American-English, fluent Italian, fluent business/marketing lingo, and fluent fashion. He was a perfect ambassador.

2. Histori-Localization: Giorgini maintained and emphasized the Italiano aspects of design. He talked about how Italian collections would have particular lines, cuts and portability that drew from the Renaissance artistic tradition. Locating the critical First Italian High Fashion Show in the 15th century Palazzo Pitti was brilliant and highly symbolic of this historical-national connection. We now find that historical and local connections are read as the harbingers of authenticity by consumers of all kinds (this goes for B2B buyers as well). There was no real historical continuity between these Renaissance designs and the current Italian fashion industry. It, too, was manufactured. And fairly recently.

3. Tuning: Giorgini not only initiated creative ideas, he knew how to sell them, by first learning, building connections, tuning in and customizing for the relevant market, which was the American (and Canadian) market, through his connections with major retailers like Bergdorf Goodman, H. Morgan, Tiffany, Bonwit Teller, and Sakowitz. Staying in touch with American buyers and customers meant that Georgini was balancing multiple needs. He was managing the creative market-driving of designers, but also matching and directing it to be market-driven by the needs and responses of the American markets. That opportunity to bring in a fresh perspective and listen exists for every entrenched market.

4. Rupture Opportunism: The timing was no accident. Paris had been battered by WW2 and Hitler had misunderstood the value and placement of the Parisian fashion center and tried at one time to move it to Berlin. Pariss dominance as a fashion center had been challenged and weakened and the time was right for a strong challenger to step in. Giorginis genius was to recognize this, get the timing right, and implement perfectly.

5. Pattern-Breaking: Giorgini planned the fashion shows to occur immediately after Paris held their own fashion shows. This left the designers with no time to imitate French fashion designs. They were forced to be innovative and unique.

I think that this story and these principles can be an inspiration for Canadian companies, industries, educators, and policy-makers to wake up and find an industry to claim (or reclaim) as its own. I think that industry should be in that oxymoronic necessity of environmental technology. I use the word technology loosely, to also denote new changes in techniques, procedures, practices, and ways of living, as well as in complex machines. Canada still has a natural (as in close-to-nature) brand meaning for the rest of the world, especially Europe and the USA (they buy Canadian mineral water for this reason). Will the world attune to our new technologies and systems to help form a more sustainable future?

What will the future cities of the world look like? Europe is ahead in innovations in this area, but with its environmental challenges, its educated workforce, and its access to capital, I think that Canada could become a quick study. The first step is that we are going to need major public and private players who recognize that the oil-and-trees boom is going to go bust very soon.

Who will be Canadas green tech Giogini? Will someone please step up? You will need to be

An excellent code-switcher, attuned to the realities of global environmental markets

Aware of local and historical backgrounds, and able to build a strong case for the basis and value of Canadian ingenuity and design in this area

Tuned into international opportunities and sales/consumption networks
Able to take advantage of the ruptures caused by the general lack of green technology or emphasis, particular in the current Bush-led America

Capable of devising ways to break Canadian thinkers, engineers, students, educators, policy-makers, and companies out of their intellectually lazy imitative funk, and able to motivate them to create novel products and procedures for a world that needs them

Canadian industry needs a new direction. Merely talking about commercialization: (the current buzzword, even worse than innovation) or innovation is far too general. Canada needs a specific sector or sectors where a small country like Canada can sustainably focus its resources literally and figuratively into particular kinds of investments and risks, portfolios of places that lock together into the kinds of microclimates and ecosystems we see in places like Silicon Valley or Hollywood/Burbank, where expertise builds on top of expertise, instead of single isolated bubbles of technology.

We have the beginnings of some interesting innovative clusters: hydrogen in BC, handheld devices in Waterloo, theater in Toronto. So how can we use the Giorgini Principles to get the geographical clustering that will attract diverse but focused talent (a la Richard Floridas very important Creative Class work), build communities of interest and concern that functional alongside the economic practicalities of workaday culture, lead to an easy informational marketplace that aggregates ideas and companies, and lead to centers of excellence that get funded and richly pay out their investments? Thats a big question, but its well worth getting our finest minds tgo start thinking about it.

Understanding Social Intelligence

Many kinds of social intelligence exist, so we need many forms of social communication to express and reach them all. This blog is an experimental text that seeks to bridge a gap between humanities and popular culture and social science forms, and to provide a resting place somewhere halfway between academia and a personal online diary written to my friends. I welcome your feedback at any and all times.